Buying a property to renovate and live in, need equity release on current property in the short term

Cooperjam

Here goes, my partner and I will be moving in together, her property is due to be sold shortly and I have a mortgage free property. My partner's property will give us around £150k once sold and we have around £25k savings. My house is valued at just over £300k. We are looking to but a property for £400k and it needs total renovation which will cost around £150k for the work we would like done. We could probably get the £225k mortgage (at a push) to buy the new property but would need a further £150k to renovate it. It will be uninhabitable while the work is being done so I would like to stay in my house and release £150k equity, then once the work is done (say all done in a maximum of 1 year) sell my house and therefore repaying the £150k equity released and leaving £150k to reduce the mortgage on the new property. I know the stamp duty will be £12k on a second property until my house is sold and can then be reclaimed, I have separate funds to cover this. I would like to know if this sounds a feasible short term option, as in get a £225k mortgage on property being renovated and release £150k equity on existing mortgage free property for one year? Our combined income is £57k pa.

dimbo61

It's complex so one for a broker.
I would consider offset mortgages as that way you can keep the funds in the Offset accounts while having the building work done in stages.
If you get Offset mortgages for both your new renovation project and your existing home you can move money around to save the most interest.
Can you get £375,000 in mortgages while earning £57,000 a year joint income is something you need to discuss with the broker.

MovingForwards

Does the proposed property have a working bathroom / kitchen, regardless of the age of it?

What's the rest of the property like? Old and tired or things falling off, holes in walls etc?

Thrugelmir

£375k of total borrowing on a £57k income may prove a challenge too far. 

Onlooker2

Check out the Early Release Charge.This comes into effect immediately at 25% of any borrowings plus probably some interest charges on  yours or anyone taking a Lifetime Mortgage to borrow monies this way.Consider

dimbo61

Not sure what Onlookers2 is talking about " Early release charge "
Could this poster live in another country ?
Confusing really and whole post not relevant to your question.

JM1981

Cooperjam, I DMd you. I think its pretty complicated.

I think there are all manner of rules that prevent someone having 2 home owner mortgages on different houses so you will have to switch one to buy to let.

You also need to give them a reason for releasing equity on your existing home and they often don't release large amounts.